Six-figures. That's what a rogue manager can cost you in punitive damages if he accidentally blows a call that HR would have caught. It's surprisingly easy for an untrained manager to step in it. We've written about a couple examples.

Don't add zeros to an employment claim.

Train your folks on your EEO and anti-harassment policy. Training, plus a solid EEO and anti-harassment policy, may give you a strong defense against punitive damages.

Never training your employees on your EEO policy strips your defense. In EEOC v. Service Temps, the company had never trained its folks. The EEOC latched onto that. At trial, the EEOC secured $68,000 in punitive damages and an injunction that imposed mandatory training. The Fifth Circuit refused to overturn the award.

Over the past couple years, your company may have pushed training to the backburner. The Fifth Circuit and Texas Supreme Court may have just sent you a friendly reminder to put training back on the agenda.

The EEOC's Houston office recently told KHOU that its annual number of new harassment complaints has doubled since 2005. KHOU wrote an article about it. Notice how the on-line article has a hyperlink to "How to file a charge with the EEOC."
What do you think caused the increase in harassment complaints? More harassment? More dollars cranked into the EEOC's budget for investigators and publicity?

An EEOC investigation can't force a company to pay a complaining employee, but can hurt your defense at trial. The EEOC can end its investigation by writing a nasty determination letter which says your company is probably guilty of discrimination. And juries eat it up.

An ex-employee who had an EEOC determination letter recently struck gold at trial. InTexas Department of Public Safety v. Williams, the jury awarded the ex-employee $619,801. Ouch! On appeal, the DPS tried to overturn the award because the trial judge let the EEOC determination letter into evidence. Texas courts first presume that a jury should see a determination letter. To exclude a letter, an employer must show that it contains only bald conclusions. No such luck for the DPS here. The letter had enough details about the EEOC's investigation and evidence to satisfy the court of appeals.

Think carefully about how you handle EEOC investigations. You can feel the consequences years later in front of a jury.

Employees accused of sexual harassment can file lawsuits too. In Jackson v. Cal-Western Packaging, an employee who was fired for sexual harassment tried it. He denied harassing anyone and said the company really fired him because of his age.

But the federal trial and appellate courts for Houston chewed up the lawsuit and spit it out. The company explained it tried to treat the accused employee fairly, yet believed the accusations. After all, it had reports from several employees and two different investigations that all said the employee was guilty. The employee could not get around that explanation for firing him with just his own word that he didn't do it. He had nothing to show that the company's decision to trust the reports and two investigations was unreasonable or in bad faith. No evidence, no lawsuit.

Look closely, there's a subtle warning for companies here: Don't haul off and immediately fire an employee accused of sexual harassment. You're creating another lawsuit. Even if it seems easier, resist the urge to make a snap judgment. Stop, separate the accuser and the accused, and do a proper neutral investigation. In my opinion, this company went above and beyond the call of duty by investigating the harassment allegations twice. One good investigation can be enough. You'll then have a reasonable basis for your decision and can defend it in court.